Mike's Mid Day Minute is available to members on Monday, Wednesday & Friday evenings, with one article per week available to non-members. Members please login and see "Mike's Mid Day Minute" in the navigation menu towards the top of the page.

FB Heading into Earnings: How Much More Immediate Upside?


Coming on the heels of Facebook (FB)'s 15% upmove since Oct. 15th, tonight's price reaction to earnings appears to be a tricky situation at best, and a dangerous situation otherwise.

Let's notice that FB climbed to a new all-time high at 81.16 today, which propelled the stock marginally above its Mar-Oct (dotted on chart) resistance line.

Thus far, FB has not accelerated to the upside after taking out the line, suggesting that investors are awaiting another bullish catalyst to buy the stock, which may or may not come in the form of a blow-out earnings report later today.

The juxtaposition of the price structure atop a mutli-month "Rising Wedge" formation in the aftermath of a 15% near-vertical upmove amidst unconfirmed momentum (RSI) seems to me to be a prescription for a "sell-the-news" reaction to EPS.

While I would not be surprised to see FB knee-jerk to still higher-highs into the 83-84 target zone, its current technical set-up is warning me that any such upmove is unlikely to be sustainable, and instead, will be used by investors to sell the strength ahead of a correction that should revisit the 73.00-70.00 support area relatively quickly.

  • Action-Oriented Trade Set-Ups in Stocks & ETFs
  • Macro Analysis of the Broader Markets
  • Detailed Technical Guidance for each Trading Idea
  • Live Interaction w/ Mike & Our Member Community
  • And Much, Much More!
Join Now! - Special Offer!
Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

Have Mike's “Out Front” morning analysis delivered FREE to your email inbox twice weekly!